All Australians will welcome the fact that unemployment has fallen again to 4.5 per cent, the lowest unemployment rate Australia has had in more than 30 years. And what that tells you is there has been no better time for a young person to be looking for a job, or an older person for that matter, in the last 30 years. These figures move around from month to month, as I have said on numbers of occasions but we have now seen unemployment below 5 per cent for nine months, we have seen in the last year 300 thousand new jobs created in our country and we have seen over the last decade 2 million new jobs created in our country. And far from the Government’s industrial relations changes leading to a loss of jobs, what we have actually seen in the aftermath of those changes is very dramatic jobs growth. So all of those people that said they were against WorkChoices because it would cost people jobs were wrong. Now, if we can continue to keep our economy growing with low inflation, if we can keep our Budget balanced with no debt, if we can continue to keep the process of economic reform going, we can keep unemployment as low as this. And getting unemployment to a low below 5 per cent is what economic policy is directed towards.

JOURNALIST:

But jobs were lost during the month, isn’t this a statistical anomaly?

TREASURER:

What we have seen in this month is an increase in full-time jobs, a decrease in part-time jobs, coming off the back of 12 months of sustained job increases, and over the last 12 months 300 thousand new jobs. Now, I don’t think we have had job creation like that in Australia for decades.

JOURNALIST:

Treasurer, are we at or near full employment now?

TREASURER:

Full employment in Australia used to be defined as an unemployment rate of 5 per cent and we are now at 4½ so we have now proven that actually full employment can go, means something lower than 5 per cent. The question is, how much lower?

JOURNALIST:

Is it possible, do you think?

TREASURER:

Well I think we ought to test it. We haven’t been where we are now for 31 years, let’s test it, let’s see if we can go lower.

JOURNALIST:

Treasurer, the jobs growth has been much greater over the last year than the growth in the economy overall, do you have any explanation for why?

TREASURER:

Look, there are various possibilities; one is that jobs growth has been a delayed indicator, another of course is the areas of the economy where jobs are created may be different from the areas that have slowed and so you might in fact get compositional changes between various sectors of the Australian economy. I think we will have to wait and see what happens over the course of the next 6 months before we can give you a final answer on that.

JOURNALIST:

Treasurer on Qantas, will you ensure that this legal loophole will be closed so that Jetstar might be able to offshore jobs even though Qantas might be stopped from doing so? Would you act on that?

TREASURER:

I don’t know what loophole you are talking about.

JOURNALIST:

It is in the Financial Review today, the fact that Jetstar is not subject to the same rules as Qantas because, even though it is a wholly owned subsidiary.

TREASURER:

No, the thing is that Qantas which is the national carrier, is subject to the Qantas Act. If Jetstar ever becomes a national carrier, presumably you would have a Jetstar Act.

JOURNALIST:

So Jetstar is not subject to those requirements?

TREASURER:

Well, as I said, there is no Jetstar sale Act because Jetstar didn’t exist until quite recently, nor was it ever a government airline, nor is it a national carrier.

JOURNALIST:

So would FIRB consider at all whether any undertakings should bind Jetstar on offshoring jobs?

TREASURER:

No, no, I don’t think you are putting that right. Jetstar is an Australian company. If Jetstar were the subject of a bid by foreign owners, of course FIRB would look at it. But if your point is that there is no Jetstar Sale Act as there is a Qantas Sale Act, perfectly right about that, that is a completely different issue and there is no Jetstar Sale Act because Jetstar was never a government airline, was never privatised, there was never any legislation required to privatise it and indeed was never a national carrier, and if I may say so, is not a national carrier. The national carrier of Australia is not Jetstar.

JOURNALIST:

Treasurer, what is the outlook for jobs and what do you think is going to drive it this year?

TREASURER:

Look, jobs are created in an economy which is growing, where business is making profits so they can employ additional people and where the structure of the labour market is friendly towards job creation. So what will create jobs this year is if we can keep the economy growing, we have improved the structure of our industrial relations laws to make them more friendly and that will give more confidence to business. But we have to keep the Australian economy growing if we are going to create more jobs. One thing we have to be careful about of course, is that as your labour market tightens, and this is a tight labour market, this is tighter than it has been for the last 30 years, that that doesn’t give rise to wage pressures which feed back into inflation. It is very much more difficult to restrain inflation in a labour market which has an unemployment rate of 4½ per cent than 8½ per cent which we use to have. So that is going to take quite a lot of management, it is going to take a lot of expertise in the years which lie ahead and people ought to think about that. You know, economic management is going to take quite a lot of expertise over the course of the next couple of years.

JOURNALIST:

(inaudible) for Government MPs to use electorate offices to promote the sale of commercial products to be involved in commercial ventures?

TREASURER:

No, I don’t think Federal MPs are entitled to use their electorate offices for commercial enterprises and I think that Jackie Kelly has made it clear that she is not doing so.

JOURNALIST:

Is it appropriate to be involved in such a venture full stop?

TREASURER:

Well a lot of people are and always have been. There are a lot of people who have businesses who come into Parliament and keep those businesses going, a lot of people do that. Always have. Unfortunately it is very hard for barristers to do that but farmers do, of course and a lot of people continue to own companies. I think there are guidelines if you are a Minister but you are not bound by those guidelines if you are not a Minister.

JOURNALIST:

Treasurer, have you had a chance to look at this report from the Murray-Darling Basin Commission which apparently shows a funding problem with the Prime Minister’s water plan?

TREASURER:

No, it hasn’t been sent to me and I would be very interested to have a look at it but as I said earlier this morning, if the Commonwealth Government is passed control of the interstate waterways and rivers in the Murray-Darling Basin by the States, the Commonwealth Government will invest $10 billion. Now, people can say we would like $10.9 billion but let me make this point, it is going to be $10 billion of investment which wouldn’t otherwise be made.

JOURNALIST:

Labor is suggesting a lot of that has been drawn from other programmes like the Living Murray Fund. How much is new money?

TREASURER:

$10 billion is new money. Let me give you a tip, don’t rely on the Labor Party.

JOURNALIST:

Treasurer, Managed Investment Schemes, several (inaudible) have said they are going to have to cut jobs because of the decision announced this week, why did the Government make the call it has and differentiate between forestry and non-forestry?

TREASURER:

No existing Managed Investment Scheme will be affected. Let’s be clear about this, there is no existing Managed Investment Scheme that is being operated that will be affected. What is being talked about is the future. So let’s be entirely clear about that point. The Government has introduced new rules to help the forestry industry and which will be of assistance to the industry because we have a policy of assisting forestry in this country. But traditionally the Government hasn’t had a policy assisting agriculture, agriculture has been a great industry for Australia for many, many years and we don’t see the need for any new rules to encourage plantations, agricultural plantations.

JOURNALIST:

Treasurer, just on unemployment, is this rate – 4.5 today – is that sustainable without putting pressure on inflation?

TREASURER:

Well look, we have a policy of keeping inflation between 2 and 3 per cent. When you have got an 8½ per cent unemployment rate, which was the case before our government was elected, it is easier to meet that target than it is on a 4½ per cent unemployment rate. And it takes a lot more skill to manage these things and that is going to be the challenge. I think it can be done but we haven’t been here for 31 years, we haven’t been in a place like this for 31 years in this country so it is going to take a new effort.

JOURNALIST:

What is the major thing that is going to keep wages and inflation under control?

TREASURER:

Good economic management. Last question.

JOURNALIST:

Does the fall in unemployment have implications for the Budget?

TREASURER:

Well when we come up to the Budget of course we will be looking not just at where unemployment is, but where we expect it to go. And you see the thing about economic management is every way you look there is a new challenge comes, with unemployment the challenge is to find jobs. Once you have found jobs the challenge is to make sure that that doesn’t spill over into unsustainable prices. That is why the business, it is tough to manage a $1 trillion economy and that is why it takes experience. You don’t just walk as a staffer out of a State Government office and say you can manage a $1 trillion economy. It takes a little bit of experience. Thanks.